Among the topics most suggested by the International Luxury Business Association’s member companies in 2016 was a reflection on the ‘Millennials’. With a considerable number of publications, conferences, etc. dealing with this topic, the question became: how to contribute meaningfully, going further into the subject? After a lot of reading, having sought out sociology, offered some leads to potentially interesting speakers, no new angle had appeared and nothing seemed to justify to take up time from already overbooked professionals.
Interested, in particular, by a remark heard on this occasion, which stated that being a ‘Millennial’ is more decisive in a consumer’s behavior than his/her country of origin, I took the time at the beginning of 2017 to question the ‘World Luxury Tracking’ * on this. Given the mass of data provided by this study, I have chosen to limit this first analysis to general questions which answers allow to apprehend the vision of luxury that consumers have in different countries, the benefits and values they attach to it, the brands that correspond to this fancy, and finally what influences them.
Although global aggregation does not necessarily make much sense, an initial assessment has emerged immediately: it seems that in emerging markets, age is not really a discriminating factor regarding projections and values attached to luxury while it seems to be a little more the case in mature markets.
Looking at the results by market, one quickly realizes that the Millennials issue is a bit more complex than we would like to believe: indeed, on some issues or in some countries Millennials are very close to the preceding generation, in other cases they are closer to the older one, and sometimes they really have specific characteristics. To simplify the reading, only the results of 5 flagship markets (USA, China, Russia, France, Japan) are presented here.
In what kind of luxury do consumers project themselves, and is age the key entry point?
The objective of the question is to understand to which products/services the word luxury immediately refers to and if age impacts the answer. On the diagram below are the answers by major markets and by age group. It shows that there is a model of projection into luxury specific to each country, and then the age introduces nuances. They are fairly minor in 3 of the 5 markets shown in this example, and there seems to be an American specificity, with the Millennials projecting themselves far more in a statutory luxury or experiential luxury than their elders, while in China, there is a somewhat similar result, albeit less marked, on the 35-49 age bracket.
Projection: Which of the following categories of products and services most bring to mind the idea of luxury for you?
How does this impact brands that are spontaneously associated with Luxury?
The overall ranking of spontaneous brand awareness in emerging / mature markets suggests that age is not a truly discriminating criterion for brand awareness, with very similar top 10 in each market, The top 3 hierarchies may vary a little depending upon age.
Awareness: 3 brands spontaneously associated with the word luxury
But if the American Millennials share 8 brands with the 35-49 in the top 10, what might, at first sight, seem to be only a minor difference deserves further attention. Indeed, what is striking in this market is the very strong presence of car brands in the top 10 brands associated spontaneously with luxury, and it seems here that the American Millennials are breaking with their elders as they put only 3 car brands in the top 10 (in favor of European luxury brands that rise in the ranking), while people aged between 35-49 and the ones aged over 50 years put respectively 5 and 6 car brands in their top 10.
What are the benefits expected from luxury? What are the values attached to luxury?
The ‘World Luxury Tracking’ asks a question to consumers in order to better understand their vision of luxury from a list of criteria that define luxury around two axes, the first one consisting in personal benefits expected from luxury, the other one in values attributed to luxury. As for the first axis, the benefits can be grouped into six poles: showing one’s social success, experiencing emotion/pleasure, aesthetic benefits (beauty/style for oneself and around oneself), enhancing one’s personality, being at the forefront of fashion trends, marking one’s belonging to a group. The diagram below shows the relative importance of these benefits for consumers in 5 major markets, according to their age group:
Perceptions of Luxury
This scheme clearly indicates that in three major markets, age is not fundamentally discriminating in the benefits expected from luxury, while Americans stand out once again, with Millennials having much higher expectations than older generations and particularly a stronger appetite for fashion and for a luxury that signs the group belonging (the end of American individualism?). The Japanese Millennials show, to a lesser extent, the same type of singularity.
Regarding the values expected from luxury, if everyone unanimously emphasizes quality, once again, in most markets, age introduces small nuances into values scales that are specific to each market. There again the American Millennials show a strong difference with their elders, expecting a lot more from luxury to be at the forefront of innovation, to demonstrate an ethical and ecological commitment (of much less interest to the oldest) and to represent a sure value, an investment, while the Japanese Millennials differ less from their elders on these points.
What are the main sources of information influencing luxury goods purchase?
Not surprisingly, in most markets, except for China, Millennials are more influenced by digital sources than preceding generations. On this either, there is no such thing as a ‘Millennials pattern’, but once again a true specificity of American Millennials, who seem to be much more open to all influences than older generations, even more so if these sources are digital. For the Japanese, who also differ somewhat on this criterion, the digital makes a difference to the younger ones if the sources are not controlled by the brands.
BRAND CONTROLLED TRADITIONAL SOURCES: Retail outlets, TV ads, print ads, printed catalogues, poster, outdoor ads, cinema ads, radio adsNON BRAND CONTROLLED TRADITIONAL SOURCES: Trends in the street, people close to me, articles and reports in the media, international stars, national starsBRAND CONTROLLED DIGITAL SOURCES: Websites, internet ads, online newsletter, mobile applications, ads on smartphonesNON BRAND CONTROLLED DIGITAL SOURCES: Blogs, newsgroups, forums, social networks
WHAT CAN BE DRAWN FROM THE PRECEDING ANALYSIS?
– – The Millennials discourse, born in the United States, and which is ‘sold’ to us as universal, is undoubtedly relevant to America, but what applies there may not apply everywhere, and definitely not for luxury.
– For luxury, the key to analyzing consumers’ expectations and behaviors remains the local culture and context, the age introducing nuances on certain dimensions, or sometimes as in the United States or Japan some real differences and these are to be interpreted according to the sociology of the country.
Obviously, this article’s objective is not to state that the Millennials have no specificity except in the USA and Japan, but rather to question a discourse that is too often simplistic and does not necessarily apply to luxury. There are indeed some more or less significant dissimilarities between younger generations and their elders, the ‘World Luxury Tracking’ * makes it possible to go much further in their analysis and to propose a more accurate understanding of these differences in order to lead to operational conclusions that will be adapted to each of the major markets.
* Created in 2007 upon the initiative of the International Luxury Business Association, the ‘World Luxury Tracking’ is a partnership between Ipsos and the latter. It is the first global quantitative study that has exploring and analyzing contemporary and forward-looking trends for the past ten years. Thanks to the power of its historical data, it allows to follow the evolution of the main indicators of luxury consumption by the wealthiest populations in 13 markets. A group of markets is studied each year by alternating the mature markets (USA, Japan, France, Italy, Spain, Germany, UK) with so-called emerging markets (Brazil, China, Russia, HK, South Korea, Thailand – addition 2016). Each year about 8000 individuals are interviewed..
The WLT covers the major segments of luxury watchmaking, jewelry, fashion, leather goods, wines, spirits, cosmetics, fragrances …
Many dimensions of luxury are tackled within a single sample:
– Values and behaviors associated with luxury
– Expectations from a luxury brand
– Expectations from on and offline retail.
– Touch points and purchase funnel
– Focus on each product category.
The 2017 wave of ‘World Luxury Tracking’ will be launched in the spring of this year. For its ten years’ anniversary, updates on the project have been planned that will allow to better take into account the evolution of markets, technologies and needs of professionals, while preserving the history that is one of the major strength of the WLT. The 2017 wave will feature modules on the United States, Europe and the Middle East.
The‘World Luxury Tracking’ Contacts :
– The International Luxury Business Association: Catherine Jubin – firstname.lastname@example.org
– Ipsos : Françoise Hernaez-Fourrier – Francoise.Hernaez@ipsos.comRead More